C-20/01

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5. Title V (Articles 15 to 22) contains 7. Under Article 16(1) of the Directive, common rules on advertising. Under contracting authorities which have Article 15(2) of the Directive, contracting awarded a public contract are to send a authorities that wish to award a public notice of the results of the award procedure service contract by open, restricted or, to the Office for Official Publications of the under conditions laid down in Article 11, European Communities. negotiated procedure, are to make known their intention by means of a notice.

6. Article 11(3) of the Directive reads: I I I— Facts and procedure

'Contracting authorities may award public A — Facts and pre-litigation procedure in service contracts by negotiated procedure Case C-20/01 without prior publication of a contract notice in the following cases:

8. The Municipality of Bockhorn, situated in the Land of Lower Saxony, concluded with the energy distribution undertaking Weser-Ems-Aktiengesellschaft (hereinafter 'EWE') a contract for the treatment of waste water. The contract entered into force on 1 January 1997 and is to last for a period of at least 30 years.

15. The competent authorities of the City of Braunschweig have not denied that the 12. In a communication of 12 May 2000, Directive was applicable to that trans- the G e r m a n G o v e r n m e n t once again action, but have contended that the trans- acknowledged the infringement. It pointed action fell within the scope of the deroga- out that, on the basis of the letter of formal tion provided for in Article 11(3) of the notice and the intervention of the federal Directive. In its letter of formal notice of Government, the Ministry of Internal 20 July 1998 the Commission rejected that Affairs of the Land of Lower Saxony, by interpretation. decree of 21 June 1999, had urged all district authorities in the Land to ensure in an appropriate manner that contracting authorities complied strictly with the Com- munity provisions on the award of public 16. By letters of 4 August, 19 October and contracts. 15 December 1998, the German Govern-

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ment submitted observations on the letter C — Procedure before the Court and of formal notice, arguing in particular that, forms of order sought in accordance with Article 11(3) of the Directive, it had, for technical reasons, been possible to award the contract only to BKB. The geographical proximity of the treatment plant to the city was an essential criterion in the award of the contract in 20. The applications brought by the Com- order to avoid shipment over longer dis- mission in Case C-20/01 and C-28/01 were tances. lodged at the Court Registry on 16 January and 23 January 2001 respectively. The cases were joined by order of the President of the Court on 15 May 2 0 0 1 .

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tation to tender were not fulfilled, the IV — Pleas in law and main arguments Federal Republic of Germany has failed to comply with its obligations under Article 8 and Article 11(3)(b) of the Directive.

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law in so far as it maintains and continues award of public supply and public works to apply the contract with BKB. Here too contracts. 3 According to that provision, the unlawful conduct persists and the the contracts concluded by the contracting Federal Republic of Germany has not taken authorities may remain valid. 4Under Ger­ all the measures necessary to comply with man law and under the relevant clauses of the Directive within the period laid down in the contracts in question, there is no the reasoned opinion. possibility of terminating the obligations in these cases, or that possibility exists only at the cost of a disproportionately high risk of liability.

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31. The United Kingdom Government and, in Case C-28/01, a finding against the points out in its statement in intervention defendant for infringement of Article 8 and that it calls into question not the admissi- Article 11(3)(b) of the Directive. bility of the actions but ·— in part — their merits. In the light also of Directive 89/665, it submits that the question whether it is possible to terminate a contract for which, wrongfully, no invitation to tender was issued, in breach of Community law, is 34. The German Government does not always a matter which falls within the deny that the Directive was applicable in competence of the Member State con- both cases, and that public tendering pro- cerned. There is no legal interest in con- cedures were necessary. That acknowledge- tinuing proceedings aimed exclusively at ment forms part of the plea of inadmis- obtaining a court decision which would be sibility. The discussion of admissibility impossible to enforce because it would be must therefore proceed on the assumption contrary to the domestic law concerned. that public invitations to tender ought to have been issued (Section B). As regards, next, the merits of the actions brought, I shall examine in particular the defence plea concerning the principle of proximity, which was raised in the alternative in Case 32. In its observations on the statement in C-28/01 (Section C). To begin with, how- intervention, the German Government con- ever, consideration must be given to the tests the admissibility of the intervention of admissibility of the intervention of the the United Kingdom Government. United Kingdom, a remarkable matter aris- ing in these proceedings (Section A).

36. In its observations on the United King- 38. I share the amazement of the Federal d o m ' s s t a t e m e n t in i n t e r v e n t i o n , the Republic of Germany and the Commission. defendant therefore called into question The United Kingdom sought and was the admissibility of the intervention in so granted leave to intervene in support of far as, in the second head of the form of the form of order sought by the Federal order it sought, the United Kingdom con- R e p u b l i c of G e r m a n y . H o w e v e r , a tended that the Court should declare that comparison of the respective forms of order the Federal Republic of Germany has failed sought shows that the second head of the to fulfil its obligations under the Treaty by form of order sought by the United King- failing in these cases to comply with the dom is the same as the orders sought by the provisions of the Directive on the award of Commission in both applications. Both the public service contracts. In the view of the United Kingdom and the Commission seek German Government, while it is true that a finding against the Federal Republic of the intervener's submissions need only Germany to the effect that it has failed to partly support the form of order sought comply with the Directive. The fact that the by one of the parties, Article 93(5)(a) of the intervener then contends that the remainder Rules of Procedure nevertheless precludes of the application be dismissed can perhaps the intervener from also opposing the party be explained by the emphasis it lays in its it is supporting. The intervention must be submissions on the effects of a judgment unambiguous, and must therefore, because finding that there has been a failure to of its partiality, either support or oppose comply with the rules on the procedure for the position of only one of the parties. In awarding public service contracts. To that this respect, intervention in infringement extent, its assessment concurs with the view proceedings differs from intervention, of the German Government. Nevertheless, under Article 20 of the Rules of Procedure, the German Government's submissions in in preliminary ruling proceedings, where an this regard form part of its defence plea intervening Member State takes on the role alleging inadmissibility, while the United of amicus curiae. Kingdom does not expressly call the admissibility of the action into question at all.

40. However, the question is whether, as take sides was quite deliberate and the the German Government claims, the inter- purpose of the intervention is not that the vention must be declared inadmissible in so intervener should support the Community far as the United Kingdom's submissions on judicature by submitting written statements the substance contradicts the German Gov- of case or written or oral observations in ernment's submissions concerning admissi- the manner of an amicus curiae, as is the bility. case under Article 20(2) of the EC Statute and Article 104(4) of the Rules of Pro- cedure. The rules of procedure applicable to the preliminary ruling procedure under Article 234 EC do not contain any restric- tions in this regard. 41. In my opinion, this question must be answered in the affirmative. After all, the wording of the Statute and the Rules of Procedure is clear. According to the fourth paragraph of Article 37 of the EC Statute of 43. Even though the Court of Justice has the Court of Justice, an application to not as yet expressly commented on this intervene is to be limited to supporting question, its case-law provides further sup- the form of order sought by one of the port for the view that the form of order parties. That provision also forms the basis sought by the intervener must not be at of Article 93(1)(e) of the Rules of Pro- odds with that sought by the party it is cedure, which states that the application to supporting. Although the Community judi- intervene must contain the form of order cature is willing to allow the intervener to sought in support of which the intervener is introduce new submissions in the proceed- applying for leave to intervene. On that ings, those submissions must either support basis, the President or the Court decides or oppose the form of order sought by one whether leave to intervene is to be granted. of the parties. 7Adding new forms of order Article 37 of the EC Statute of the Court of or requesting in the statement in inter- Justice is developed further in Article 93(5) vention that the Court should rule on other of the Rules of Procedure, which lays down issues renders the intervention inadmiss- requirements as to the content of the ible. 8 The same applies to submissions by statement in intervention. According to the intervener which, although intended to Article 93(5)(a), inter alia, this must con- support the form of order sought by one of tain 'a statement of the form of order the parties, are based on grounds entirely sought by the intervener in support of or unconnected with those on which the form opposing, in whole or in part, the form of of order sought by the party supported is order sought by one of the parties'. 6 based. 9It follows from this that the inter- vener is not at liberty to deviate at will from the form of order sought by the party it is formally supporting.

44. The intervener is certainly not at liberty the fact that the infringements of the Treaty to intervene in the dispute by opposing the had already ceased to exist when the time- form of order sought by the party it limits laid down in the reasoned opinions supports. In its application of 17 April expired. In its submission, the conclusion of 2001, the United Kingdom requested leave the contracts with EWE and BKB respect- to intervene in support of the form of order ively also ended the acknowledged infringe- sought by the Federal Republic of Ger- ments of the provisions of the Directive. many, and by order of 18 May 2001, the According to the national law applicable, President of the Court expressly granted which is compatible with Community leave to intervene in support of the form of law — Article 2(6) of Directive 89/665 order sought by the defendant. 1 0The —, an infringement of the procedural rules second head of the form of order sought contained in the directive does not affect in the statement in intervention, that a the validity of the contracts in question, declaration be made to the effect that the which can therefore remain in force. Con- Federal Republic of Germany has failed to sequently, the Commission no longer has comply with the procedural rules laid down an objective interest in continuing the in the Directive, is contrary to the order of proceedings, especially as the German the President of the Court. Government has for its part taken the measures necessary to prevent any repeti- tion of the infringements committed.

orities actually comply with the relevant district authorities, it has fulfilled its legal provisions of the Directive. Thirdly, they obligations at least for the future is in my must take action to prevent threatened view unsatisfactory. The Court has con- infringements of those provisions. sistently held that the Member States remain fully responsible for ensuring com- pliance with the Directive in their spheres of territorial competence. They cannot evade responsibility for any future infringe- ments of the Directive by taking the matter 49. If it appears, on the basis of actual up with the local authorities. circumstances, that a Member State has failed to fulfil or has not adequately fulfilled that threefold duty of care, the ensuing situation is incompatible with the result which the Directive seeks to achieve. Freedom to provide services is then no longer guaranteed. 12 52. The point made by the Commission at the hearing that it has received further complaints concerning infringements of the directive in question, some of which like- 50. In that regard, the Commission has an wise relate to refuse, makes clear the objective legal interest in obtaining a judg- ongoing nature of the duty of care incum- ment from the Court to the effect that, in bent on Member States in the transposition the context of the relevant contracts and application of the Directive. The pur- awarded by the Municipality of Bockhorn pose of the Directive means that the ques- and the City of Braunschweig, the Federal tion whether the duty of care has been Republic of Germany has failed to fulfil its fulfilled usually has to be determined on the obligations. Such a finding against the basis of individual breaches of that duty. In defendant extends beyond those two indi- my opinion, that in itself renders untenable vidual cases, since it also shows that the German Government's view that the Germany, the addressee of the Directive, action brought by the Commission in this has not done everything necessary to ensure case is inadmissible. that it is enforced.

way to systematic infringements of the Court under Article 228(2) EC to impose a Directive committed by means of long-term penalty payment on Member States which contracts which are legally unassailable. In fail to comply with judgments. If, as the the case of certain types of economic German Government considers, the Court activity carried on under the responsibility were required to declare inadmissible of the public authorities, such as refuse actions brought by the Commission to disposal or highway maintenance, the inter- obtain a declaration on infringements of nal market for services would thus be the Directive which have become 'defini- geographically compartmentalised. It need tive', the Court of Justice would be left with hardly be said that such a consequence is no means of coercion under the afore- contrary to the main aims of the Directive. mentioned article in the event of repeated infringements of the Directive. The Com- munity would then be powerless in the face of systematic infringements of the Direc- tive, with no legal remedy at its disposal. 54. It must therefore by open to the Com- mission in individual cases, to obtain an order from the Court to the effect that a Member State is systematically failing to comply with its obligations under the Directive, or is in danger of failing to do so. 57. The continuation of the infringement proceedings, even if confined to the two cases pending, makes very good sense. The Commission has rightly pointed out that the alleged infringements will continue to 55. Seen against that background, a finding produce legal effects, since they led to the as to the existence of two actual infringe- conclusion of long-term contracts. The ments of the Directive goes further than the award of the contracts has therefore not interest involved in obtaining such a find- yet produced all its legal effects. 14 Nor is ing. The purpose of the infringement pro- there here a situation which is inherently cedure under Article 226 EC is not only to unrectifiable. put an end to the infringement itself, but also to bring about a change in behaviour on the part of the recalcitrant State and prevent any repetition. 13 That result could no longer be achieved if the view of the German Government were accepted. 58. The contracts in question came into existence as a result of unlawful conduct, a fact which has a bearing on the legal position of the parties to those contracts

whose interests could have been adversely 60. In view of the foregoing, the remainder affected by those infringements of the law. of the German Government's submissions An infringement of the procedural rules can be quickly dealt with. contained in the Directive can give rise to claims on the part of individuals, including claims for damages, which must be pursued in accordance with the relevant procedures under national law. 15The assertion by the German Government that no third parties suffered any damage in these cases is 61. The maxim pacta sunt servanda is not- irrelevant, since that fact cannot affect the relevant here, since the Commission has not admissibility of an action brought under denied that the contracts concluded can, as Article 226 EC. 16 Moreover, that argu- such, continue to exist. However, that does ment is open to question in so far as, not affect the aforementioned possibility of according to the documents before the claims for damages as an alternative rem- Court, the Commission investigated the edy. Nor is that possibility altered by the alleged irregularities following complaints. fact that, as the German Government argues, the national liability laws are adequate and an action for damages based on Community law would be unnecessary. For the purposes of deciding whether an action for failure to fulfil obligations under the Directive is admissible, the state of the national liability laws is not decisive in any event.

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63. The German Government also con- satisfied in this case. The treatment of tends that the action brought by the Com- waste water is a service within the meaning mission breaches the principle ne ultra of Article 8 and Annex I A, category 16 petita and is therefore inadmissible. This ('sewage and refuse disposal services; sani- argument must be rejected for the simple tation and similar services'). Even though reason that the forms of order sought in the EWE gave the Municipality of Bockhorn an applications are the same in substance as undertaking that, as well as actually dis- the complaints raised by the Commission in posing of the waste water, it would also the pre-litigation procedure and, in par- install certain sewerage facilities, the execu- ticular, in the reasoned opinion. 19 In both tion of those works was without question cases, the Commission seeks a declaration incidental to the main object of the that, in the invitations to tender in ques- contract, namely the treatment of waste tion, Germany has infringed the same water. Despite the mixed character of the procedural rules of the Directive. contract, works, in so far as they are incidental to, rather than the object of, the contract, do not justify treating the contract as a public works contract within the meaning of the Directive on the award of public works contracts. 20 Even if the 64. In view of the foregoing, I consider that contract is confined to the part relating to in both cases there is a legal interest in the treatment of waste water in the narrow bringing proceedings and that the actions sense, its value far exceeds the maximum brought by the Commission are admissible. value of EUR 200 000 for the entire contract laid down in Article 7 of the Directive.

of the award procedure to the Office for contract could be awarded only to BKB, Official Publications of the European Com- which was already established in Braun- munities. schweig. The City of Braunschweig opted for a method of treating waste locally which made it possible to avoid the ship- ment of waste over longer distances. The proximity of the refuse disposal facility was 67. Moreover, the complaints raised by the therefore an essential condition for the Commission in Case C-20/01 are not in fact performance of the contract in question. challenged by the German Government. In The criterion of the proximity of the its reply, the German Government refers processing facilities and the short shipping entirely, as regards the merits of the case, to distance is thus consistent, according to the its submissions on the plea of inadmis- German Government, with the principle sibility. Those, however, are clearly unten- that environmental damage should as a able. priority be rectified at source. That prin- ciple is laid down in Article 174(2) EC (formerly Article 130r(2) of the EC Treaty), and has been clarified by the Court of Justice in its case-law. 2 1 In view of the facilities available at its headquarters, BKB 2. Case C-28/01 was the only undertaking in a position to carry out the refuse treatment using the desired thermal procedure. At the time when the contract was concluded, no other undertaking had the waste disposal facil- 68. In this case, it is common ground that, ities required in the Braunschweig area, as when awarding the contract in question to was shown by a market analysis conducted BKB, the City of Braunschweig clearly by the City of Braunschweig. If new indus- proceeded on the assumption that the trial plant had had to be built, the deadlines Directive was applicable. The parties are laid down for comprehensive refuse dis- in dispute as to whether the conditions for posal could not have been met. awarding a contract by negotiated pro- cedure under Article 11(3) of the Directive were fulfilled. According to that provision, public service contracts may be awarded without prior publication of a contract notice, inter alia, in the case of services which, for technical reasons, may be entrusted only to a particular service pro- vider.

exception to the general principle, must be prove that the exceptional circumstances i n t e r p r e t e d restrictively. O n l y if the justifying it actually exist. 22 contract in question can indeed, for the reasons expressly stated in that provision, be performed by only one particular under- taking, may it be awarded by negotiated procedure. N o evidence has been adduced, however, to show that the contract in this 73. The option given by Article 11(3) of the case could be performed only by BKB. Directive to contracting authorities to award public contracts without prior pub- lication of a notice is justified by the fact that, in these cases, there is only one suitable source of procurement. In those circumstances, the obligation to issue a public invitation to tender would lead to an 7 1 . The Commission submits that, what- unnecessary procedure. In order for that ever significance is attached to environ- provision to be successfully relied on, it mental criteria in the award of public must therefore be irrefutably established contracts, they may never be applied in a that there really is only one undertaking discriminatory manner. That is what, in its capable of performing the contract in view, has happened here. Geographical question. proximity was the only criterion used, whilst other environmental issues were disregarded. For example, outside under- takings could have proposed the use of other procedures for disposing of non- hazardous refuse. Moreover, in the event of conflicting interests, the proximity prin- 74. In a recent judgment in Concordia Bus ciple laid down in Article 174(2) EC does Finland, the Court of Justice held that not take precedence over other Community environmental protection criteria are also objectives, but is to be taken into account, a m o n g the criteria for the a w a r d of as appropriate, only in the implementation contracts which may be taken into account of Community policy. by t h e c o n t r a c t i n g a u t h o r i t y u n d e r Article 36(1)(a) of the Directive. 23 In the light of that case-law, it is in my opinion conceivable that principles relating to the environment should also be taken into account in the context of the application of Article 11(3) of the Directive, when determining whether there is only one 72. It must be pointed out first of all in this source of procurement. However, the judg- respect that the Commission has rightly ment in Concordia Bus Finland also shows stated that the scope of Article 11(3) of the that reliance on environmental criteria in Directive, as a derogation from the rule that contracts covered by the Directive are to be awarded in accordance with the 22 — Cf., to that effect, the judgment in Case C-318/94 Community procedure, must be interpreted Commission v Germany [1996] ECR I-1949, paragtaph 13. restrictively. This means that the person 23 — Judgment in Case C-513/99 Concordia Bus Finland [2002] seeking to rely on that derogation must ECR I-7213, patagtaph 57.

75. In particular, there is an intrinsic danger of indirect discrimination in the 77. Even though the City of Braunschweig application of Article 11(3) of the Direc- has opted for a particular form of refuse tive, since that derogating provision is, by disposal, the contracting authority can definition, premissed on unequal treatment none the less be expected to provide and preference for an individual contractor. convincing evidence, when relying on the The view taken by the German Govern- derogation provided for in Article 11(3) of ment means that tenderers established in the Directive, that the same result — Braunschweig are given priority, and refuse disposal — could not have been sources of procurement located elsewhere achieved just as effectively from the point are excluded right from the start. That of view of environmental technology makes it all the more necessary to adduce through the use of other techniques. That convincing evidence where use is made of evidence can be supplied if the criteria on the derogation under Article 11(3). which the decision to use that form of refuse disposal was based are objective and transparent. In these proceedings, Germany has failed to substantiate, or has substanti- ated inadequately, its assertion that a solution which did not take account of shipping distances would be unwise from 76. In my opinion, the German Govern- an ecological point of view. Moreover, it- ment has not succeeded in providing con- has not in any way been shown to be the vincing evidence that BKB was indeed the case that shipment of the refuse in question only conceivable source of procurement over longer distances would in any event which the City of Braunschweig could pose a threat to the environment or, as the reasonably commission to provide (ther- case may be, to public health. 2 5 mal) refuse disposal services. Leaving aside the question whether the report produced for the City of Braunschweig and cited by 25 — In tins connection, see also the judgment i n Case C-203/96 the German Government is reliable, it is Dusseldorp and Others [1998] ECR I-4075, paragraphs 46 and 47. That case concerned the question whether the inconceivable that a contract to be con- recycling of oil filters in other Member States and their shipment over a greater distance for the purposes of being cluded for a term of no less than 30 years exported would pose a threat to the health and life of humans within the meaning of the present Article 30 EC. Not only did the documents before the Court show that the recycling of filters was comparable in the two Member States concerned, but it was not established before the 24 — Judgment in Concordia Bus Finland (cited in footnote 23, Court that the shipment of oil filters posed a threat to the paragraphs 59 to 64, with references to earlier decisions}. environment or to the life and health of humans.

(1) Declare that, by failing to invite tenders for the award of the contract for the treatment of waste water in the Municipality of Bockhorn and to arrange for notice of the results of the procedure for the award of the contract to be published in the S Series of the Official Journal of the European Commu- nities, the Federal Republic of Germany has failed to comply with its obligations under Article 8 in conjunction with Article 15(2) and Article 16(1) of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts;

(2) Order the Federal Republic of Germany to pay the costs;

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in Case C-28/01:

(1) Declare that, by virtue of the fact that the City of Braunschweig awarded a contract for refuse disposal by negotiated procedure without prior pub- lication of a contract notice, notwithstanding that the criteria laid down in Directive 92/50 for an award by negotiated procedure without a Community- wide invitation to tender were not fulfilled, the Federal Republic of Germany has failed to comply with its obligations under Article 8 and Article 11(3)(b) of Council Directive 92/50/EEC;